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Venture Capital Financing and Sustenance of General Service SMEs in Nigeria

Okechukwu Ferdinand CyrilNwuche, PhD

Abstract

This study investigated the influence of venture capital financing on the sustenance of general service SMEs in Nigeria. Specifically, it examined how access to venture capital influences business continuity and market share of these enterprises. The study adopted a descriptive survey research design to gather data from a sample of 393 SME operators, drawn from a population of 21,187 general service SMEs as recorded in the 2017 SMEDAN National MSME Survey. Data were collected using a structured questionnaire and analyzed using both descriptive statistics and Spearman’s Rank Order Correlation. The study found that: access to venture capital financing has a positive and significant influence on business continuity among general service SMEs in Nigeria (rho = 0.724, p = 0.000); access to venture capital financing has a positive and significant influence on market share of general service SMEs in Nigeria (rho = 0.673, p = 0.000). In conclusion, firms able to secure venture capital support are more likely to sustain operations over time, reduce vulnerability to financial shocks, and maintain a stable presence in the marketplace. To improve business continuity among general service SMEs, the Bank of Industry (BoI) and other development finance institutions in Nigeria should expand and simplify access to venture capital schemes specifically designed for SMEs. This can be achieved by reducing the bureaucratic bottlenecks and collateral requirements often associated with funding access, and by establishing dedicated venture capital desks that focus on general service sectors.

Keywords

Venture Capital FinancingBusiness SustenanceBusiness ContinuityMarket

References

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